Tyntec Inc. et al v. Syniverse Technologies, LLC

Middle District of Florida, flmd-8:2017-cv-00591

Objection to Report and Recommendations

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2 PageID 27682 UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION TYNTEC, INC. and TYNTEC GROUP, LTD. f/k/a Phoenix Spring, Ltd., Case No.: 8:17-cv-591-SDM-SPF Plaintiffs, v. SYNIVERSE TECHNOLOGIES, LLC., Defendant. PLAINTIFFS' OBJECTIONS TO THE MAGISTRATE JUDGE'S AUGUST 19, 2019 REPORT & RECOMMENDATION 2 PageID 27683 TABLE OF CONTENTS INTRODUCTION ...........................................................................................................................1 ARGUMENT ...................................................................................................................................3 I. There Are Genuine Disputes of Material Fact as to Whether Syniverse Committed Monopolization in Violation of the Sherman Act.................................3 A. Syniverse Illegally Refused to Deal with tyntec. .........................................4 1. The Magistrate Judge Overlooked and Misinterpreted Critical Evidence That Demonstrates Why tyntec Could Not Accept Syniverse's Anticompetitive Offers. ............................6 2. The Magistrate Judge Misread Aspen Skiing. ..................................9 B. tyntec and Syniverse Had a Longstanding, Voluntary Course of Dealing. ......................................................................................................13 C. Syniverse Did Not Have Valid Business Justifications for Refusing to Deal with tyntec......................................................................18 D. Syniverse's Anticompetitive Conduct Harmed Competition in the U.S. ICV Market. .................................................................................21 II. There Are Genuine Disputes of Material Fact as to Whether Syniverse Committed Attempted Monopolization in Violation of the Sherman Act. ................................................................................................................................24 III. There Are Genuine Disputes of Material Fact as to Whether Syniverse Tortiously Interfered With tyntec's Contracts and Prospective Business Relationships. .........................................................................................................25 CONCLUSION ..............................................................................................................................25 i 2 PageID 27684 TABLE OF AUTHORITIES Page(s) Cases Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (1985) ...............................................................................................................3, 5 Covad Commc'ns Co. v. BellSouth Corp., 374 F.3d 1044 (11th Cir. 2004) .........................................................................................14, 15 Docmagic, Inc. v. Ellie Mae, Inc., No. 3:09-CV-4017-MHP, 2011 WL 871480 (N.D. Cal. Mar. 11, 2011) ........................3, 5, 11 Dove v. McCormick, 698 So.2d 585 (Fla. 5th DCA 1997) ........................................................................................14 Drew v. Ocwen Loan Servicing, LLC., No. 8:14-CV-369-T-26TGW, 2015 WL 12698435 (M.D. Fla. May 20, 2015) ........................3 Duty Free Americas, Inc. v. Estee Lauder Companies, Inc., 797 F.3d 1248 (11th Cir. 2015) ...............................................................................................15 Eastman Kodak Co. v. Image Tech. Servs., Inc., 504 U.S. 451 (1992) .................................................................................................................19 Garlington v. Kima, No.1:17-CV-131-MW/GRJ, 2018 WL 793630 (N.D. Fla. Jan. 3, 2018) ................................22 Great Am. Alliance Ins. Co. v. Anderson, 847 F.3d 1327 (11th Cir. 2017) .................................................................................................5 Gulf States Reorganization Grp., Inc. v. Nucor Corp., 466 F.3d 961 (11th Cir. 2006) ...........................................................................................22, 23 In re Advanced Telecomm. Network, Inc., No. 618-CV-1186-ORL28GJK, 2018 WL 4627669 (M.D. Fla. Sept. 26, 2018) ....................23 It's My Party, Inc. v. Live Nation, Inc., 2012 WL 3655470 (D. Md. 2012) ...........................................................................................18 Lauren Kyle Holdings, Inc. v. Heath-Peterson Constr. Corp., 864 So.2d 55 (Fla. 5th DCA 2004) ..........................................................................................14 Leesburg Cmty. Cancer Ctr. v. Leesburg Reg'l Med. Ctr., Inc., 972 So.2d 203 (Fla. 5th DCA 2007) ........................................................................................14 ii 2 PageID 27685 MetroNet Servs. Corp. v. Qwest Corp., 383 F.3d 1124 (9th Cir. 2004) ...................................................................................................3 Morris Communications Corp. v. PGA Tour, Inc., 364 F.3d 1288 (11th Cir. 2004) ...............................................................................................15 Mun. Utilities Bd. of Albertville v. Alabama Power Co., 934 F.2d 1493 (11th Cir. 1991) ...............................................................................................22 Networkip, LLC v. Spread Enters., Inc., 922 So.2d 355 (Fla. 3d DCA 2006) ...........................................................................................4 Novell, Inc. v. Microsoft Corp., 731 F.3d 1064 (10th Cir. 2013) ...............................................................................................18 Omni Healthcare, Inc. v. Health First, Inc., No. 6:13-CV-1509-ORL, 2015 WL 275806 (M.D. Fla. Jan. 22, 2015) ......................13, 22, 24 Prescription Partners, LLC v. State, Dep't of Fin. Servs., 109 So.3d 1218 (Fla. 1st DCA 2013) ......................................................................................14 Procaps S.A. v. Patheon Inc., 36 F. Supp. 3d 1306 (S.D. Fla. 2014) ......................................................................................22 Safeway Inc. v. Abbott Labs., 761 F. Supp. 2d 874 (N.D. Cal. 2011) .....................................................................................12 Shipman v. CP Sanibel, LLC., No. 2:18-CV-139-FTM-29UAM, 2019 WL 2301599 (M.D. Fla. May 30, 2019) ..........................................................................................................................................7 St. Charles Foods, Inc. v. America's Favorite Chicken Co., 198 F.3d 815 (11th Cir. 1999) ...................................................................................................7 Steward Health Care System, LLC v. Blue Cross & Blue Shield of Rhode Island, 997 F. Supp. 2d 142 (D.R.I. 2014).....................................................................................15, 16 Sumotext Corp. v. Zoove, Inc., No. 16-CV-01370-BLF, 2018 WL 1876937 (N.D. Cal. Apr. 19, 2018) .................................12 Thompson v. Metro. Multi–List, Inc., 934 F.2d 1566 (11th Cir. 1991) ...............................................................................................22 Trofin v. Costco Wholesale Corp., No. 2:18-CV-338-FTM-MRM, 2019 WL 1776866 (M.D. Fla. Apr. 23, 2019) ........................5 trueEX, LLC v. MarkitSERV Ltd., 266 F. Supp. 3d 705 (S.D.N.Y. 2017)......................................................................................17 iii 2 PageID 27686 United States v. IBM Corp., 66 F.R.D. 180 (S.D.N.Y. 1974) ...............................................................................................18 United States v. Real and Personal Prop. Belonging to Hayes, 943 F.2d 1292 (11th Cir. 1991) .................................................................................................3 Verizon Commc'ns Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398 (2004) ...........................................................................................................14, 15 Wate v. Kubler, 839 F.3d 1012 (11th Cir. 2016) .................................................................................................4 Statutes 15 U.S.C. § 2 .......................................................................................................................... passim Rules Federal Rule of Civil Procedure 72(b)(2) ........................................................................................1 iv 2 PageID 27687 Pursuant to Federal Rule of Civil Procedure 72(b)(2), Plaintiffs tyntec Inc. and tyntec Group LTD. (together, "tyntec") raise the following objections to the Magistrate Judge's August 19, 2019 Report and Recommendation ("R&R") (Dkt. #240). INTRODUCTION When the Court first considered the parties' cross-motions for summary judgment, it found "genuine disputes as to the material facts with regard to several critical issues." Dkt. #141 (7/13/18 Order) at 2 (emphasis added). It was "abundantly clear," the Court concluded, that there were genuine factual disputes regarding:  "[W]hether the parties had an established, voluntary, and profitable relationship";  "[W]hether Defendant illegally refused to deal with Plaintiffs when Defendant terminated the Iris Peering Agreements"; and  "Whether Defendant had legitimate business and financial reasons not to enter into a business relationship with Plaintiffs when Defendant terminated the Iris Peering Agreements." Id. at 1-2 (emphases added). Because of these disputes, the Court denied the parties' cross-motions for summary judgment and determined "that the better course of action is to proceed to a full trial on the merits." Id. at 2-3. But when the Magistrate Judge considered the very same summary judgment motions one year later, he found zero disputes of material fact as to these and other critical issues in the case. In a complete reversal from the Court's original ruling, the Magistrate Judge dismissed all of tyntec's claims against Defendant Syniverse Technologies, LLC ("Syniverse")—monopolization under Section 2 of the Sherman Act, 15 U.S.C. § 2; attempted monopolization under Section 2 of the Sherman Act, 15 U.S.C. § 2; and tortious interference with contract and business relations. In 1 2 PageID 27688 reaching that result, the Magistrate Judge overlooked key evidence in tyntec's favor; construed evidence in the light most favorable to Syniverse; and misapplied binding federal and state law. Those were errors, and the Magistrate Judge's disposition of the parties' cross-motions for summary judgment—denying tyntec's motion and granting Syniverse's—was error as well. The effects of those errors go far beyond this case. Syniverse is a monopolist that has repeatedly abused its dominant market power to destroy competition in the U.S. inter-carrier vendor ("ICV") market. As the Magistrate Judge recognized, Syniverse has tread in these waters before: Just four years ago, Syniverse settled a nearly identical antitrust lawsuit brought by tyntec's predecessor-in-interest, Iris Wireless LLC ("Iris"), in this District. R&R at 4. But Syniverse did not learn its lesson. To the contrary, Syniverse's own documents make clear that when tyntec tried to enter the U.S. ICV market in 2016, Syniverse did everything it could to exclude tyntec in order to neutralize a "direct threat" to Syniverse's business. Dkt. #116 (tyntec Motion for Summary Judgment ("MSJ")), Ex. 7 (emphasis added) (attached hereto as Exhibit 1).1 This is a classic example of illegal, anticompetitive conduct that violates the Sherman Act. And under the Magistrate Judge's R&R, that conduct will go unredressed to the detriment of tyntec and the U.S. ICV market as a whole. The Court reached the right result the first time around. tyntec respectfully submits that the correct outcome in this case is to deny the parties' cross-motions for summary judgment and schedule a trial date. The Court has already ruled on most of the parties' motions in limine, Dkt. #244 (9/3/19 Order); the parties have already filed trial briefs, proposed verdict forms, proposed jury instructions, and proposed voir dire questions, Dkt. #198-201, #218-19; and a trial should last 1 For ease of reference, these Objections include record citations ("Dkt. #") for the summary judgment exhibits cited herein and these documents are attached as exhibits. In the case of deposition transcripts and certain documents Syniverse has moved to keep under seal, see Dkt. #246, Plaintiffs have attached relevant excerpts rather than full documents. 2 2 PageID 27689 no longer than one week. This case is ready for trial. And because of the volume of critical fact disputes in this case, a trial is necessary to ensure that tyntec's claims receive a full and fair adjudication on the merits. See Drew v. Ocwen Loan Servicing, LLC, No. 8:14-CV-369-T-26TGW, 2015 WL 12698435, at *1 (M.D. Fla. May 20, 2015) (relying on "established Supreme Court and Eleventh Circuit precedent" and explaining "that '[a] trial court is permitted, in its discretion, to deny even a well-supported motion for summary judgment, if it believes the case will benefit from a full hearing'" (quoting United States v. Real and Personal Prop. Belonging to Hayes, 943 F.2d 1292, 1297 (11th Cir. 1991))). ARGUMENT I. There Are Genuine Disputes of Material Fact as to Whether Syniverse Committed Monopolization in Violation of the Sherman Act. Syniverse engaged in a prototypical "practical" refusal to deal. With no legitimate business justification, Syniverse—which controls 75%-80% of the U.S. ICV market, see R&R at 3, 15— refused to deal with tyntec on anything but onerous terms, and insisted that tyntec agree to "an offer that [it] could not accept." Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585, 592 (1985) (emphasis added); see also Docmagic, Inc. v. Ellie Mae, Inc., No. 3:09-CV-4017-MHP, 2011 WL 871480, at *6 (N.D. Cal. Mar. 11, 2011) ("A cognizable refusal to deal for purposes of antitrust law [ ] need not be 'outright.' An 'offer to deal with a competitor only on unreasonable terms and conditions can amount to a practical refusal to deal.'" (quoting MetroNet Servs. Corp. v. Qwest Corp., 383 F.3d 1124, 1132 (9th Cir. 2004))). But in the face of evidence establishing all of the elements of tyntec's refusal to deal claim, the Magistrate Judge concluded as a matter of law: 1. That Syniverse did not unlawfully refuse to deal with tyntec; 2. That Syniverse and tyntec did not have a prior voluntary course of dealing; 3 2 PageID 27690 3. That Syniverse had legitimate business justifications for refusing to deal with tyntec; and 4. That tyntec failed to show that Syniverse's conduct harmed competition. R&R at 16-31.2 To reach that result, the Magistrate Judge discounted (or outright ignored) crucial evidence in tyntec's favor and misapplied antitrust law. And when presented with conflicting evidence on several key issues, the Magistrate Judge weighed the evidence to Syniverse's benefit—an approach that is forbidden on summary judgment. E.g., Wate v. Kubler, 839 F.3d 1012, 1018 (11th Cir. 2016). Put simply, the Magistrate Judge largely repeated Syniverse's side of the story,3 and in the process erroneously dismissed tyntec's monopolization claim. A. Syniverse Illegally Refused to Deal with tyntec. The Magistrate Judge first found "that Syniverse's refusal to agree to a 'bill and keep' arrangement or alternate but feasible terms" with tyntec was "lawful." R&R at 16. That conclusion is internally inconsistent, not supported by the record, and misconstrues Aspen Skiing, the canonical refusal to deal case. The Magistrate Judge reached some conclusions that are clearly correct. For starters, the Magistrate Judge recognized that the market for ICV services in the United States is hyper-concentrated—"[t]here are three companies that sell ICV services in the U.S. ICV market: 2 The Magistrate Judge found genuine disputes of material fact as to "whether Syniverse possessed monopoly power in the relevant market," R&R at 16, and tyntec does not object to that finding. 3 Some parts of the R&R simply quote Syniverse's summary judgment papers with almost no alteration. Compare R&R at 33 ("Syniverse had a contractual right not to renew the Iris Peering Agreements and engaging in acts expressly permitted under the terms of a contract does not constitute tortious interference. See Networkip, LLC v. Spread Enters., Inc., 922 So.2d 355, 358 (Fla. 3d DCA 2006) ("No cause of action for intentional interference exists which is the consequence of a rightful action.")), with Dkt. #119 (Syniverse MSJ) at 38 ("Syniverse had a contractual right not to renew the 2015 Iris Agreements, and engaging in acts expressly allowed for under the terms of a contract is not tortious interference. See Networkip, LLC v. Spread Enterprises, Inc., 922 So.2d 355, 358 (Fla. Dist. Ct. App. 2006) (rejecting claim for contract cancellation because 'cancellation of the contract, as a matter of law, does not constitute the intent to damage necessary for [plaintiff] to maintain a cause of action for intentional interference with a business relationship')"). 4 2 PageID 27691 Syniverse, SAP, and tyntec." R&R at 2.4 The Magistrate Judge also concluded that Iris, tyntec's predecessor-in-interest, was an ICV. Id. at 4. And the Magistrate Judge recognized that as far as peering agreements between ICVs are concerned, the "[h]istorical[ ]" practice among "parties to peering agreements" is to follow "bill and keep"—"the business model employed between Syniverse and ICVs for more than twelve years." Id. (emphasis added). But, as the Magistrate Judge recounted, when tyntec tried to renew the bill and keep Iris Peering Agreements, Syniverse completely disavowed this longstanding industry practice and refused to continue a bill and keep relationship. See id. at 16-17. Then, the Magistrate Judge committed an error that ultimately undermines the entire R&R. The Magistrate Judge concluded that because "there is no genuine issue of material fact as to whether Syniverse was willing to negotiate an agreement with tyntec, albeit on terms other than strictly 'bill and keep,'" then Syniverse could not have engaged in an illegal refusal to deal. R&R at 17 (emphasis added). That reasoning eviscerates the concept of a "practical" refusal to deal— the theory tyntec has pursued in this case and which has long been cognizable under the Sherman Act. See DocMagic, 2011 WL 871480, at *6 ("A practical refusal to deal requires that a party make an offer on such unreasonable terms that it amounts to no offer at all."). For several reasons, the Magistrate Judge's conclusion is incorrect on the facts and the law. 4 Although tyntec submits that there is no genuine dispute of material fact as to whether tyntec is an ICV, "Syniverse disputes the categorization of tyntec as an ICV." R&R at 2 n.1. Without stating outright that this is a genuine factual dispute, the Magistrate Judge remarked: "tyntec's argument that it 'has indications of activity. . . that would map to an ICV' is not sufficient to establish pretext regarding" Syniverse's alleged "concerns" over peering with tyntec. R&R at 29. The Magistrate Judge, however, failed to note that this "map to an ICV" language came from testimony that John Wick, Syniverse's Senior Vice President and General Manager of Mobile Transaction Services, gave during the Court's April 13, 2017 TRO hearing. tyntec MSJ at 12 (quoting Dkt. #83 (4/13/17 Hr'g Tr.) at 255:1-3). Because Syniverse itself recognizes that tyntec is an ICV, any dispute over this issue cannot be "genuine." See, e.g., Trofin v. Costco Wholesale Corp., No. 2:18-CV-338-FTM-MRM, 2019 WL 1776866, at *2 (M.D. Fla. Apr. 23, 2019) ("A dispute 'is genuine if there is sufficient evidence such that a reasonable jury could return a verdict for either party.'" (emphasis added) (quoting Great Am. Alliance Ins. Co. v. Anderson, 847 F.3d 1327, 1331 (11th Cir. 2017))). 5 2 PageID 27692 1. The Magistrate Judge Overlooked and Misinterpreted Critical Evidence That Demonstrates Why tyntec Could Not Accept Syniverse's Anticompetitive Offers. tyntec submitted ample evidence illustrating why it could not accept Syniverse's non-bill-and-keep offers. The Magistrate Judge concluded that tyntec did "not explain specifically why it was unable to accept Syniverse's initial or subsequent offers and [did] not submit any pertinent evidence in support of the proposition that tyntec would be 'forced to exit the market' based on the terms offered by Syniverse." R&R at 17-18. Not so—here are three critical pieces of evidence that show why tyntec could not accept Syniverse's (unacceptable) offers, each of which creates a genuine dispute of material fact sufficient to defeat summary judgment: February 28, 2017 Niaz Alibhai E-mail: Syniverse knew that offering a bill and keep peering agreement to tyntec would enable tyntec to compete against it. Niaz Alibhai, Syniverse's Director of Production Management who oversaw Syniverse's ICV business, could not have made this clearer when he told his boss in February 2017: "I am not in agreement to give [tyntec] +1 to +1 free that is 99.5% of their traffic and direct threat for them to take our customers."5 Exhibit 1. The implication of this smoking-gun email is obvious: By refusing to offer tyntec a bill and keep peering agreement, Syniverse ensured that tyntec would not be able to compete in the U.S. ICV market and potentially "take [Syniverse's] customers." Although the Magistrate Judge discussed this e-mail in his R&R, see R&R at 21 (referencing "comments made by Alibhai"), 26 (quoting e-mail), he did not address Mr. Alibhai's characterization of tyntec as a "direct threat" once. The only inference the Magistrate Judge drew from Mr. Alibhai's e-mail was that it did "not suggest Syniverse intended to forgo profits." Id. at 5 "+1" refers to the prefixes of North American phone numbers. As tyntec explained in its Statement of Uncontested Facts: "Under. . . 'bill and keep,' ICVs do not charge one another for exchanging +1 to +1 SMS and MMS traffic" (hence Mr. Alibhai's characterization of a bill and keep agreement as "+1 to +1 free"). Dkt. #117 (tyntec Statement of Uncontested Facts ("SOUF")), ¶ 8. 6 2 PageID 27693 21; accord id. at 26. That is a purely one-sided interpretation of a devastating e-mail for Syniverse. Under Rule 56, "if reasonable minds might differ on the inferences arising from undisputed facts, then the court should deny summary judgment." Shipman v. CP Sanibel, LLC, No. 2:18-CV-139-FTM-29UAM, 2019 WL 2301599, at *1 (M.D. Fla. May 30, 2019) (quoting St. Charles Foods, Inc. v. America's Favorite Chicken Co., 198 F.3d 815, 819 (11th Cir. 1999)). So too here: Drawing all reasonable inferences in tyntec's favor, this e-mail demonstrates that Syniverse deliberately excluded tyntec from the U.S. ICV market by not offering a bill and keep peering agreement, and that that strategy was motivated by Syniverse's anticompetitive intent. Roland Dennert Deposition Testimony: Roland Dennert, a private equity executive and one of tyntec's primary financial backers, testified that it would be "impossible" for tyntec "to compete in the ICV market without a peering agreement" (as opposed to the "standard customer agreement" that Syniverse insisted on during its negotiations with tyntec). tyntec SOUF, Ex. 5 at 174:4-21) (attached hereto as Exhibit 2); see also id. at 171:2-13 (testifying that Syniverse's refusal to negotiate "a peering agreement" with tyntec, and its insistence that tyntec accept "a standard customer agreement," made it "hard to transform into something that would allow [tyntec] to compete in the ICV market"). The Magistrate Judge discounted Mr. Dennert's testimony. He wrote that Mr. Dennert did not specifically reference "tyntec's inability to compete" or "tyntec being 'forced to exit the market,'" did "not define 'compete," and did "not explain. . . why the terms of the 'customer agreement' offered by Syniverse were unreasonable" (the Magistrate Judge did not, however, explain why these "magic words" would be necessary for tyntec to survive summary judgment). R&R at 18. In fact, Mr. Dennert discussed all of these issues during his deposition, in testimony the Magistrate Judge did not cite in the R&R. See Exhibit 2 at 88:24-89:19 (explaining that tyntec's 7 2 PageID 27694 "clear ambition was to take away people like Sprint, Verizon, and AT&T, from where they are today" and "to be on par or larger than Syniverse in the ICV market"); id. at 155:13-56:17 (recalling that Syniverse proposed a "standard customer agreement" to tyntec during a January 27, 2017 meeting, which was "fundamentally different" from the existing Syniverse-tyntec agreement and was "likely fundamentally different to the agreement that SAP has with Syniverse" because "it [didn't] have any bill and keep arrangements, which is the historic course of dealing in the ICV world"); id. at 173:9-13 (testifying that "[i]t would be impossible" for tyntec to compete for "AT&T under a standard customer agreement"); id. at 174:4-21 (drawing distinction between tyntec's ability to compete in the "A2P" [application to person] and "CPaaS" [communications platform as a service] markets, on the one hand, and the "ICV market" on the other and explaining that it is "impossible to compete in the ICV market without a peering agreement"); see also id. at 171:14-23 (explaining, in testimony cited in R&R, that "[t]he key element of" a "peering agreement," as opposed to a "standard customer agreement," "is the bill and keep mechanism"); Mr. Dennert was clear: tyntec cannot compete for wireless carrier customers in the U.S. ICV market unless Syniverse agrees to negotiate a bill-and-keep peering agreement—a standard customer agreement is not enough. See, e.g., id. at 173:9-13. Syniverse's refusal to renew the Iris Peering Agreements eliminated tyntec's chances of competing in that market, and that refusal was completely inconsistent with industry practice and the parties' course of dealing. 2014 Syniverse-Iris Litigation: Syniverse has tried these very same tactics before—with tyntec's predecessor-in-interest Iris no less. See tyntec SOUF, Exhibit 96, at SNVR00088865 (Alibhai writing in 2014 e-mail: "Syniverse/IRIS signed a peering agreement in 2004 which was bill keep until we forced an amendment in 2011. . . . Re-Enabling P2P peering with [Iris] will hurt us strategically/financially in the market place." (emphasis added)) (attached hereto at Exhibit 8 2 PageID 27695 3). Iris sued Syniverse for monopolization and attempted monopolization after Syniverse tried to end their bill and keep peering arrangement; Syniverse settled the case by entering into two brand new bill and keep peering agreements (one for SMS messaging and one for MMS messaging). tyntec SOUF ¶¶ 48-51. Here again, there is a clear implication: Iris was willing to settle its lawsuit against Syniverse once it had the tools that would allow it to compete in the U.S. ICV market—bill and keep peering agreements. And yet the Magistrate Judge undervalued the importance of bill and keep, and in the process ignored longstanding industry practice in the U.S. ICV market and evidence illustrating the critical nature of bill and keep peering agreements to ICVs. 2. The Magistrate Judge Misread Aspen Skiing. After overlooking critical evidence and drawing every salient inference in favor of Syniverse and against tyntec, the Magistrate Judge misread Aspen Skiing. The Magistrate Judge found Aspen Skiing inapplicable because Syniverse did "not demand[ ] that tyntec agree to a revenue or cost structure that is considerably out of sync with actual usage." R&R at 19. Put differently: Because the terms of Syniverse's negotiations with tyntec (which occurred in 2016 and 2017 in the U.S. ICV market) differed from the terms of Defendant Ski Co.'s negotiations with Plaintiff Highlands (which occurred in the late 1970's in the Aspen, Colorado ski resort market), the Magistrate Judge found Aspen Skiing distinguishable. That approach finds zero support in Aspen Skiing—the Magistrate Judge should have looked at the commercial arrangement between the parties (bill and keep) and the U.S. ICV market generally (same) to determine whether Syniverse's conduct was anticompetitive. And viewed through that lens, it is clear that Syniverse unlawfully refused to deal with tyntec. Consider, for example, the analogy the Magistrate Judge drew in the R&R: 9 2 PageID 27696 … tyntec's insistence on a "bill and keep" agreement is distinguishable from the plaintiff in Aspen Skiing. To put tyntec's position in the context of Aspen Skiing, tyntec essentially wants to bill its customers for, and keep all revenue from, a ski ticket that its competitor must honor at their mountains regardless of whether tyntec's customers are disproportionately using the competitor's mountains. R&R at 20. Billing customers and keeping all revenue from providing ICV services, regardless of use, is how every single United States ICV operates under a bill and keep model. This arrangement was baked into every peering agreement Syniverse signed with tyntec, Iris, and SAP over the course of many years. See tyntec SOUF ¶¶ 41-45. Bill and keep is the commercial arrangement between the parties to this suit and the U.S. ICV market as a whole. The Magistrate Judge's failure to consider these facts in his refusal to deal analysis is a major legal error. Aspen Skiing resolves this case in tyntec's favor. Like the U.S. ICV market today, the ski resort market in Aspen, Colorado during the mid-to-late 20th century was hyper-concentrated: Defendant Ski Co. owned three of the four local resorts, and Plaintiff Highlands owned the fourth. Aspen Skiing, 472 U.S. 585, 587-89 and nn.2-5. For many years, the resorts offered a ticket that skiers could use interchangeably at any of the area mountains (the "all-Aspen ticket"); the resorts split all-Aspen ticket revenues based on usage (so if a skier used an all-Aspen ticket to ski at Highlands, that would count towards Highlands's proportional share of ticket revenues). Id. at 589-91. But then, Ski Co. unilaterally changed course. It demanded that Highlands agree to accept a fixed, low percentage of revenues from the all-Aspen ticket—"an offer that [Highlands] could not accept." Aspen Skiing, 472 U.S. at 592. This was a practical refusal to deal, because although Ski Co. was willing to negotiate some kind of deal with Highlands, there was no commercially practicable way for Highlands to accept it. When Highlands declined Ski Co.'s offer, Ski Co. ended the all-Aspen ticket and Highlands's revenues suffered mightily. Id. at 593-95. "Ski Co.'s 10 2 PageID 27697 decision to terminate the all-Aspen ticket," the Supreme Court explained, "was thus a decision by a monopolist to make an important change in the character of the market." Id. at 604 (emphasis added). And that decision, the Supreme Court concluded, constituted an unlawful refusal to deal in violation of the Sherman Act. Id. at 611. Just so here. When Syniverse refused to honor the bill and keep peering agreements that Iris assigned to tyntec, it disrupted the character of the U.S. ICV market. The Magistrate Judge downplayed this seismic shift by noting that "Syniverse's offer to tyntec was consistent with its pricing to some of Syniverse's other SMS-IP customers" and "Non-CMRS" customers. R&R at 20. But that apples-to-oranges comparison is irrelevant under the Sherman Act. tyntec is an ICV, not a customer of Syniverse's, so to assess whether Syniverse refused to deal with tyntec the Magistrate Judge should have looked at commercial agreements between U.S. ICVs (not between ICVs and their customers). See Aspen Skiing, 472 U.S. at 602 and n.30 (assessing evidence of commercial practices "in other multimountain areas" to determine whether Ski Co.'s conduct was anticompetitive); Docmagic, 2011 WL 871480, at *10 (denying summary judgment on plaintiff's practical refusal to deal claim where "a trier of fact could reasonably infer that" the price defendant extended to plaintiff "is not the price currently offered to and paid by companies situated similarly to" plaintiff (emphasis added)). The contracts Syniverse has with its customers have nothing to do with peering relationships between U.S. ICVs, and they have nothing to do with the commercial history between Syniverse, Iris, and tyntec. Other parts of the R&R confirm that the Magistrate Judge confused the distinction between customers and ICVs in concluding that Syniverse did not unlawfully refuse to deal with tyntec. For example, the Magistrate Judge recognized that under a bill and keep model, "parties to peering agreements"—meaning ICVs like Syniverse and tyntec—"do not directly charge each other for 11 2 PageID 27698 carrying the other's messaging traffic, but rather pass the charges on to the telecommunications carriers." R&R at 4 (emphasis added). But later in the R&R, the Magistrate Judge reasoned as follows: Syniverse's business relies in part on charging companies for the contractual right to send messages to those carriers. As such, the Court does not find it "irrational" for Syniverse to want to charge tyntec rather than give its services away via tyntec's preferred billing terms. Id. at 29 (emphasis added). Syniverse charges carriers—not other ICVs—to send messages to other carriers (tyntec does the same). But that is irrelevant here: The Magistrate Judge should have evaluated the commercial arrangement between Syniverse and tyntec (which has always been bill and keep) and the commercial arrangements between ICVs in the U.S. ICV market (same). The Magistrate Judge's reasoning—that because Syniverse routinely charges its messaging customers, there is no antitrust issue if it likewise decides to charge another ICV for transmitting messages—is completely inconsistent with the Sherman Act, Aspen Skiing, industry practice in the U.S. ICV market, and the evidentiary record in this case. And Syniverse's insistence that tyntec pay Syniverse on a per-message basis for transmitting messaging traffic—when every other ICV, including Iris and tyntec, have historically paid nothing under a bill and keep model—is a practical refusal to deal. See Sumotext Corp. v. Zoove, Inc., No. 16-CV-01370-BLF, 2018 WL 1876937, at *7 (N.D. Cal. Apr. 19, 2018) (denying motion to dismiss plaintiff's practical refusal to deal claim where defendant demanded that plaintiff agree to a "10,000% mark-up"); Safeway Inc. v. Abbott Labs., 761 F. Supp. 2d 874, 894-95 (N.D. Cal. 2011) (denying summary judgment as to plaintiff's practical refusal to deal claim where defendant increased price of pharmaceutical drug by 400%). There is a single company that has tried to disrupt the longstanding, industry-standard bill and keep course of dealing in the U.S. ICV market: Syniverse. Syniverse tried this tactic with Iris, and then with tyntec. And Syniverse's own documents prove that it unilaterally ended its bill 12 2 PageID 27699 and keep course of dealing with tyntec because it was concerned that tyntec might take its customers. The law is clear that Syniverse refused to deal with tyntec, and tyntec adduced ample evidence to defeat Syniverse's motion for summary judgment. B. tyntec and Syniverse Had a Longstanding, Voluntary Course of Dealing. The Magistrate Judge next concluded that even if tyntec could show that Syniverse refused to deal, it could not raise a fact dispute as to whether tyntec and Syniverse had "a course of established, voluntary, and profitable dealing." R&R at 22. Here too, the Magistrate Judge misapplied the law and failed to draw reasonable factual inferences in tyntec's favor: First, the Magistrate Judge erroneously concluded that in order for tyntec to pursue a refusal to deal claim against Syniverse, "an explicit assignment of an antitrust claim from Iris to tyntec would be required." R&R at 23. That puts the cart before the horse. The key legal question is whether the course of dealing between Iris and Syniverse, not a refusal to deal claim that accrued after the Iris Peering Agreements were executed, was assigned to tyntec. And the language of the assignment clauses in the Iris Peering Agreements could not be clearer that the answer to that question is "yes." Both of the Iris Peering Agreements provided that "[i]n the event of [an] assignment, all terms and conditions of this Agreement shall be binding upon and inure to the assignee as though such assignee were an original party to this Agreement." tyntec SOUF, Ex. 21, § 13.4 (attached hereto as Exhibit 4); tyntec SOUF, Ex. 22, § 12.4 (attached hereto as Exhibit 5). Syniverse knew that Iris might assign all of its rights under the Iris Peering Agreements to a third party, and nothing in the agreements suggests that Iris's course of dealing with Syniverse was somehow carved out of this sweeping assignment. Florida law points in the same direction. "[O]n the subject of assignments, the common law 'speaks in a loud and consistent voice: An assignee stands in the shoes of his assignor.'" 13 2 PageID 27700 Prescription Partners, LLC v. State, Dep't of Fin. Servs., 109 So.3d 1218, 1222 (Fla. 1st DCA 2013) (emphasis in original) (quoting Dove v. McCormick, 698 So.2d 585, 589 (Fla. 5th DCA 1997)). There is an important corollary to that rule: "Following an assignment. . . the 'assignor retains no rights to enforce the [assigned] contract' at all." Leesburg Cmty. Cancer Ctr. v. Leesburg Reg'l Med. Ctr., Inc., 972 So.2d 203, 206 (Fla. 5th DCA 2007) (emphases added) (quoting Lauren Kyle Holdings, Inc. v. Heath-Peterson Constr. Corp., 864 So.2d 55, 58 (Fla. 5th DCA 2004)). That means that Iris, post-assignment, retained no rights to enforce the Iris Peering Agreements against Syniverse. tyntec is the only party that can enforce whatever rights accrued to Iris under those contracts. And there is nothing in the Iris Peering Agreements, and no principle of Florida law, that suggests that Iris's course of dealing with Syniverse was somehow erased when the assignment took effect. The Magistrate Judge recognized that under Florida law, "the assignee 'stands in the shoes of the assignor' and is able to enforce the terms of the contract." R&R at 22-23 (citation omitted). But the Magistrate Judge concluded that Iris needed to explicitly assign "an antitrust claim" to tyntec in order for tyntec to pursue such a claim against Syniverse. But how could Iris assign claims that had not yet accrued? It couldn't. The most Iris could do was exactly what it did together with Syniverse, which was to include a broad assignment provision in the Iris Peering Agreements, which ensured that Iris could assign all of its rights under the agreements, including Iris's longstanding course of dealing with Syniverse, to a third party. Notwithstanding settled Florida law and the broad assignment clauses in the Iris Peering Agreements, the Magistrate Judge reasoned that "the assignment of the Iris Peering Agreements to tyntec belies the required 'voluntary' aspect of the course of dealing between tyntec and Syniverse." R&R at 24-25. But the cases the Magistrate Judge relied on—Trinko and Covad— 14 2 PageID 27701 are easily distinguishable: In both, a federal statute—The Telecommunications Act of 1996— required the plaintiff and defendant to deal. Verizon Commc'ns Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398, 409 (2004); Covad Commc'ns Co. v. BellSouth Corp., 374 F.3d 1044, 1049 (11th Cir. 2004).6 Here, by contrast, Syniverse peered with Iris and later tyntec through a series of contracts that Syniverse executed. Syniverse voluntarily peered with Iris, then voluntarily executed the Iris Peering Agreements, which left no question that Iris could assign all of its rights to a third party. The bill and keep peering relationship Syniverse has had with Iris, then tyntec, from 2004 to the present is a voluntary one. Second, the Court dismissed tyntec's argument that Iris assigned its course of dealing with Syniverse to tyntec because "[n]one of the cases cited by tyntec extend the assignee's ability to enforce the terms of an assigned contract to include the assignee's assumption of the assignor's course of dealing history in an antitrust refusal-to-deal claim." R&R at 24. Not so. Steward Health Care System, LLC v. Blue Cross & Blue Shield of Rhode Island, cited in tyntec's opposition to Syniverse's motion for summary judgment, Dkt. #130 (tyntec MSJ Opp.) at 20, involved a remarkably similar scenario: A (thwarted) acquirer bringing a practical refusal to deal claim based, in part, on the course of dealing of the entity it would have acquired but for the defendant's anticompetitive conduct. 997 F. Supp. 2d 142, 153-54 and n.9 (D.R.I. 2014). Although the Magistrate Judge cited a later-in-time Steward opinion that tyntec discussed in its summary judgment papers, R&R at 24—an opinion in which the District of Rhode Island denied defendant's motion for summary judgment as to plaintiff's refusal to deal claim—the 6 Other refusal to deal cases that the Magistrate Judge cited are also inapposite. In Duty Free Americas, Inc. v. Estee Lauder Companies, Inc., the plaintiff conceded that it had "terminated [its] relationship" with the defendant. 797 F.3d 1248, 1267 (11th Cir. 2015). And in Morris Communications Corp. v. PGA Tour, Inc., the plaintiff wanted to resell "real-time golf scores" compiled by the defendant (a clear example of free-riding). 364 F.3d 1288, 1291-92, 1295-96 (11th Cir. 2004). tyntec, in contrast, wants to sell its own ICV services to customers, and tyntec has spent millions of dollars developing those services—tyntec is not a free-rider by any stretch. tyntec SOUF ¶ 21. 15 2 PageID 27702 Magistrate Judge did not mention this earlier Steward opinion, which makes clear that a party may pursue a refusal to deal claim based on a contractual predecessor's course of dealing. Indeed, the District of Rhode Island confronted this issue head-on, explaining: "While it cannot be said that Steward and Blue Cross had a prior course of dealing with each other with respect to Landmark, the Court is not aware of case law that would preclude consideration of Blue Cross' own direct prior course of dealing with Landmark." Id. at 154 n.9 (emphasis added). Nor, apparently, is Syniverse aware of such caselaw. Although Syniverse has briefed this issue many times, it has not presented the Court a single case prohibiting an assignee from pursuing a refusal to deal claim based on its assignor's course of dealing. Third, the Magistrate Judge found "no dispute that the Iris Peering Agreements were, in fact, of no financial benefit to Syniverse." R&R at 26. In fact, this is a highly disputed issue, and when those disputes are resolved in tyntec's favor it is clear that the Magistrate Judge's conclusion was erroneous. Syniverse has been peering—on bill and keep terms—with Iris (and later tyntec) since 2004 and is still peering with tyntec today. See tyntec SOUF ¶ 43 ("From April 20, 2004 until April 20, 2014, every peering agreement and amendment signed between Iris Wireless and Syniverse contained a 'bill and keep' provision for +1 to +1 SMS and MMS traffic."); tyntec SOUF, Ex. 24 at 252:11-57:9 (Mr. Alibhai testifying that tyntec and Syniverse are still exchanging messaging traffic for Flyp and Shelcomm and that he is unaware of anyone at Syniverse demanding payment for that traffic) (attached hereto as Exhibit 6).7 It is counterintuitive to assume that Syniverse maintained this relationship out of charity. tyntec made this argument in its summary judgment papers, but the Magistrate Judge dismissed it as an "unadorned representation[ ] of counsel." R&R at 26 (citation and quotation mark removed). In fact, in support of this argument 7 At Syniverse's request, tyntec has redacted certain information in Exhibit 6 that Syniverse has designated "Highly Confidential." The redactions can be found at Page 142, Lines 10 and 19 of Exhibit 6. 16 2 PageID 27703 tyntec cited a recent Southern District of New York decision—not discussed in the R&R—that drew this very same inference. See trueEX, LLC v. MarkitSERV Ltd., 266 F. Supp. 3d 705, 720-21 (S.D.N.Y. 2017) (analogizing case to Aspen Skiing and reasoning that "despite [defendant's] quibble about the profitability for it of" its relationship with plaintiff, "it has been profitable for [defendant] to at least some extent, else it would not have continued the relationship") (quoted in tyntec MSJ Opp. 27 n.4). The undisputed facts are that Syniverse has peered with Iris, then tyntec, for well over a decade; a (more than) reasonable inference from those undisputed facts is that this peering relationship was profitable. The key evidence the Magistrate Judge cited in support of his conclusion that the Syniverse-Iris peering relationship was unprofitable was Niaz Alibhai's February 28, 2017 e-mail in which he characterized tyntec as a "direct threat." R&R at 26 (citing, and explaining parenthetically, Exhibit 1). The Magistrate Judge fully credited Mr. Alibhai's statement in that e-mail that "[t]here is no financial gain for [Syniverse] to sign [tyntec] up as they would be more dependent on us for reach and with that comes high overhead." R&R at 26. Nothing in that e-mail confirms that the then-existing Syniverse-Iris relationship was unprofitable (let alone confirms that undisputedly). But even more importantly, the Magistrate Judge missed a key issue from Mr. Alibhai's deposition: Mr. Alibhai testified that he threw away his calculations of the costs of peering with tyntec. Exhibit 6 at 142:22-47:6. Syniverse's claim that peering with tyntec would have been unprofitable is a critical fact issue in this case, and yet by Mr. Alibhai's account the only evidence backing up that claim is "in the trash." Id. at 147:4-6. That is a stunning concession that severely undermines Syniverse's assertion (and the Magistrate Judge's conclusion) that the undisputed facts of this case prove "that the Iris Peering Agreements were, in fact, of no financial benefit to Syniverse." R&R at 26. 17 2 PageID 27704 Fourth, and finally, the Magistrate Judge concluded that the post-April 2017 direct course of dealing between Syniverse and tyntec is irrelevant to tyntec's refusal to deal claim because the Magistrate Judge concluded that that course of dealing was "borne only from the initiation of this litigation." R&R at 25. This is factually incorrect. Syniverse and tyntec have had a bill and keep peering relationship since late 2016, both before and after tyntec filed this lawsuit. See Exhibit 6, at 75:10-76:2 (Mr. Alibhai testifying that from September 2016 to April 2017, "there was a peering agreement that was still valid" between Syniverse and tyntec); id. at 252:11-57:9 (Mr. Alibhai testifying that tyntec and Syniverse are still exchanging Flyp and Shelcomm traffic).8 And in 2017, the Court denied tyntec's two motions for a temporary restraining order, Dkt. #62 and 85, and Syniverse is free to cancel the Iris Peering Agreements "with 90 days' written notice," R&R at 5. Nonetheless, Syniverse's bill and keep course of dealing with tyntec continues. The key takeaway from this continued course of dealing is that bill and keep is the industry standard for U.S. ICVs, and Syniverse's attempt to disrupt that course of dealing is aberrant and anticompetitive. C. Syniverse Did Not Have Valid Business Justifications for Refusing to Deal with tyntec This next part of the R&R is a stark example of the Magistrate Judge's wholesale acceptance of Syniverse's narrative. The Magistrate Judge agreed with all of Syniverse's "several 8 In April and May 2018, tyntec even tried to pay Syniverse a monthly fee in exchange for a bill and keep peering agreement—but Syniverse refused. R&R at 21-22; see tyntec SOUF ¶ 67. The Magistrate Judge reasoned that tyntec's continued attempts to negotiate a bill and keep peering agreement were "irrelevant to the analysis of tyntec's refusal to deal claim because tyntec's offers occurred after tyntec had initiated this litigation." R&R at 21. But Syniverse initially refused to deal with tyntec months before tyntec filed suit; it's not as though the instant litigation precipitated Syniverse's refusal to deal. And because tyntec has "alleged an ongoing antitrust violation, which necessarily includes the time period both before and after the filing of the complaint," tyntec is permitted "to introduce post-complaint activities relevant to [its] claim of ongoing antitrust violations." It's My Party, Inc. v. Live Nation, Inc., 2012 WL 3655470, at *3 (D. Md. 2012); see also United States v. IBM Corp., 66 F.R.D. 180, 184-85 (S.D.N.Y. 1974) (holding that where "the complaint charges defendant with a continuing violation of Section 2 of the Sherman Act," the "violation charged encompasses the post-complaint time period" meaning "both the pre-complaint and post-complaint activities of defendant" may "be inquired into by plaintiff"). Syniverse's continued refusal to peer with tyntec—even when tyntec is willing to pay Syniverse for peering—is clear evidence of Syniverse's "willingness to sacrifice short-term profits." Novell, Inc. v. Microsoft Corp., 731 F.3d 1064, 1076 (10th Cir. 2013). 18 2 PageID 27705 reasons for not renewing the Iris Peering Agreements with tyntec," and rejected out of hand tyntec's counterargument that those reasons were pretext. R&R at 26-30. But Syniverse's own documents show that Syniverse refused to deal with tyntec, at least in part, because it wanted to eliminate tyntec as a competitive threat. Those documents raise genuine disputes of material fact as to whether Syniverse's business justifications were valid, and for that reason the Magistrate Judge should have recommended denying Syniverse's motion for summary judgment. See Eastman Kodak Co. v. Image Tech. Servs., Inc., 504 U.S. 451, 483 (1992) (where "[f]actual questions exist" about "each claimed justification" put forward by a Section Two defendant, "summary judgment [is] inappropriate") Here is a chronology of Syniverse documents that makes this plain—the Magistrate Judge cited none of these documents in his pretext analysis: January 12, 2017 Niaz Alibhai E-mail: Even before Syniverse demanded that tyntec accept a commercially unreasonable contract, Syniverse took steps to neutralize tyntec as a competitor. On January 12, 2017, Mr. Alibhai wrote to John McRae, a senior manager at Syniverse, that he had not given tyntec critical documents it needed to onboard new customers. tyntec MSJ, Ex. 10 at SNVR00032253 (attached hereto as Exhibit 7). The reason? Per Mr. Alibhai: "I have been stalling this request in anticipation that we would be successful in terminating this peering agreement by April." Id. (emphases added). Syniverse knew all along that it was going to "terminat[e]" its peering relationship with tyntec. These initial anticompetitive acts—which stymied tyntec's efforts to enter the U.S. ICV market—laid the groundwork for Syniverse's ultimate refusal to deal. January 24, 2017 Niaz Alibhai E-mail: Mr. Alibhai was not finished trying to sabotage Syniverse. On January 24, 2017—three days before Syniverse made its first offer that tyntec could 19 2 PageID 27706 not accept—Mr. Alibhai recounted a conversation he had with tyntec's President Eddie DeCurtis in November 2016 (when Syniverse told tyntec that it would not renew the Iris Peering Agreements). See R&R at 6-7. In explaining to his supervisor why he had been "rude" to Mr. DeCurtis, Mr. Alibhai wrote: "[A]s a competitor had to be firm to protect our business and our customer traffic." tyntec SOUF, Ex. 62 at SNVR00016605 (emphasis added) (attached hereto as Exhibit 8). This is yet another contemporaneous example of Syniverse revealing its true, anticompetitive intentions behind its refusal to deal with tyntec. February 21 and 23, 2017 Patrick Boyle E-Mails: Mr. Alibhai wasn't the only Syniverse employee who recognized that tyntec was Syniverse's competitor. In the midst of tyntec's negotiations with Syniverse, Syniverse employee Patrick Boyle sent several of his co-workers an e-mail titled "P2P Tyntek," writing: "I see that we have some new competition in the P2P space." tyntec SOUF, Ex. 58 (emphasis added) (attached hereto as Exhibit 9). Mr. Spinks went on: "are we treating these guys like a normal peer?" Id. The answer, of course, was no—a normal peer would receive a bill and keep peering agreement. And Mr. Spinks also recognized that tyntec and Iris were one and the same, asking his peers: "And are we charging them the same term[ination] fees we did with the old iris???" Id. (emphasis added). After hearing no response, Mr. Spinks followed up two days later: "So guys – any thoughts on the new competition?" tyntec SOUF, Ex. 59 (emphasis added) (attached hereto as Exhibit 10). At the very same time Mr. Boyle sent these e-mails, Syniverse was trying to exclude this "new competition" from the U.S. ICV market—these e-mails speak volumes about Syniverse's anticompetitive intent. February 28, 2017 Niaz Alibhai E-mail: There could be no clearer distillation of Syniverse's justification for not renewing the Iris Peering Agreements. As Mr. Alibhai wrote: "I am not in agreement to give +1 to +1 free that is 99.5% of their traffic and direct threat for them 20 2 PageID 27707 to take our customers." Exhibit 1 (emphasis added). This e-mail should have been reason enough for the Magistrate Judge to find a genuine dispute of material fact as to whether Syniverse's proffered justifications for refusing to deal with tyntec were valid. One last point. The Magistrate Judge accepted Syniverse's argument that it was worried about extending a bill and keep peering agreement to tyntec "because, in late 2016 and early 2017, tyntec did not have any wireless carrier customers" and "there was no indication that tyntec would be a real partner for P2P messaging." R&R at 27-8. This is factually incorrect: Shelcomm, one of tyntec's customers, held a valid Commercial Mobile Radio Service ("CMRS") license from the FCC. See Dkt. #131 (tyntec Statement of Disputed Material Facts ("SODMF")) ¶ 58 (citing Shelcomm CMRS license, attached to tyntec Daubert motion as Exhibit 18) (attached hereto as Exhibit 11); R&R at 2 (explaining that "telecommunications companies that hold [CMRS] licenses issued by the FCC" are customers of ICVs). Indeed, Syniverse's own documents categorize Shelcomm as a CMRS carrier. See, e.g., tyntec SODMF ¶ 91 (citing February 1, 2017 Syniverse Reach List, attached to tyntec Daubert motion as Exhibit 22) (attached hereto as Exhibit 12). The Magistrate Judge simply got this issue wrong. See R&R at 29 (accepting as "fact" Syniverse's argument "that tyntec has two small Non-CMRS customers"). D. Syniverse's Anticompetitive Conduct Harmed Competition in the U.S. ICV Market. The final part of the Magistrate Judge's refusal to deal analysis suffers from a serious legal error. The Magistrate Judge deemed "irrelevant" tyntec's argument "that Syniverse's exclusion has done serious damage to tyntec's plans to compete in the U.S. ICV market." R&R at 31. The Magistrate Judge apparently reasoned that exclusion of a market participant (like tyntec) cannot constitute harm to competition. See id. 21 2 PageID 27708 Not so. "A plaintiff's exclusion from the market as a result of an antitrust violation constitutes antitrust injury." Procaps S.A. v. Patheon Inc., 36 F. Supp. 3d 1306, 1329 (S.D. Fla. 2014); see, e.g., Garlington v. Kima, No. 1:17-CV-131-MW/GRJ, 2018 WL 793630, at *4 (N.D. Fla. Jan. 3, 2018) ("[T]he Eleventh Circuit 'has recognized. . . that an attempt to enter a market coupled with a showing of preparedness is sufficient to establish an injury in fact [under the antitrust laws].'") (quoting Thompson v. Metro. Multi–List, Inc., 934 F.2d 1566, 1572 (11th Cir. 1991)); Omni Healthcare, Inc. v. Health First, Inc., No. 6:13-CV-1509-ORL, 2015 WL 275806, at *8 (M.D. Fla. Jan. 22, 2015) (holding that plaintiffs' "financial harm from [d]efendants' efforts to exclude them from the" relevant "markets" . . . "flow[s] from 'interference with the freedom to compete' and thus [is] remediable under the Clayton Act"). That is because market exclusion "inflicts financial harm on excluded plaintiffs while decreasing competition in the relevant market." Omni Healthcare, 2015 WL 275806, at *8 (citing Gulf States Reorganization Grp., Inc. v. Nucor Corp., 466 F.3d 961, 967-68 (11th Cir. 2006)). By excluding tyntec from the U.S. ICV market, Syniverse "deprived [tyntec] of the opportunity to compete for future customers"—and "[t]his injury certainly falls within the class of injuries which the Sherman Act sought to protect against." Mun. Utilities Bd. of Albertville v. Alabama Power Co., 934 F.2d 1493, 1500 (11th Cir. 1991); see tyntec SOUF, Ex. 9 ¶¶ 48-50 (tyntec's expert economist Dr. Parker Normann explaining how "Syniverse's unilateral decision to terminate [the Iris Peering Agreements] has restricted the ability of tyntec to compete and onboard new customers, effectively limiting the number of U.S. ICV providers from three to two") (attached hereto as Exhibit 13); tyntec SOUF, Ex. 4, at 40:10-42:22 (Dr. Normann testifying that "in the but for world with [t]yntec able to fully compete. . . competition would be higher and prices would be lower. So as a result of [Syniverse's] conduct there has been harm to competition 22 2 PageID 27709 and harm to consumer welfare.") (attached hereto as Exhibit 14); see also In re Advanced Telecomm. Network, Inc., No. 618-CV-1186-ORL28GJK, 2018 WL 4627669, at *4 (M.D. Fla. Sept. 26, 2018) ("It is settled law in the Eleventh Circuit that an expert report can be used to create a genuine issue of material fact that precludes summary judgment. . . . In fact, cases relying on expert witnesses are often not amenable to decision at the summary judgment stage."). When Syniverse deliberately excluded tyntec from the U.S. ICV market, Syniverse damaged tyntec and competition in that market as a whole. And the Magistrate Judge recognized that Syniverse's anticompetitive conduct has already harmed consumers (telecommunications carriers) in the U.S. ICV market. The Magistrate Judge noted, for example, that tyntec submitted evidence that Syniverse insisted on "increased pricing" when it was negotiating with Flyp (a tyntec customer Syniverse tried to steal). R&R at 30-31. To be clear: Syniverse offered Flyp a very low rate for messaging traffic in the fall of 2016 (when the Iris Peering Agreements were still active), then increased that rate ten-fold right around the time it terminated the Iris Peering Agreements. tyntec SOUF ¶ 36. That is a classic example of the market harm that the Sherman Act is supposed to prevent. See Nucor, 466 F.3d at 967-68 ("[E]xclusion from the relevant market [ ] is inseparable from. . . harm to competition. It is this same exclusion from the market that denies consumers the benefit of pressure to lower prices that would likely accompany [plaintiff] becoming a viable competitor."). Syniverse has destroyed tyntec's chances of competing in the U.S. ICV market and consumers have suffered for it. The Magistrate Judge's conclusion that Syniverse's conduct did not cause "harm to competition in general," R&R at 31, is flatly inconsistent with Eleventh Circuit precedent. 23 2 PageID 27710 *** Decades of antitrust law and a voluminous factual record point in the same direction: When Syniverse terminated the Iris Peering Agreements and refused to negotiate a bill and keep peering agreement with tyntec, Syniverse disrupted a longstanding, voluntary commercial relationship and disavowed years of industry practice in the U.S. ICV market. tyntec has suffered because of Syniverse's anticompetitive conduct. So have consumers in the U.S. ICV market. In this case— where Syniverse's own documents prove that its refusal to deal with tyntec on anything but onerous terms was motivated, at least in part, by Syniverse's fear of competing against tyntec— tyntec's monopolization claim should go to a jury. II. There Are Genuine Disputes of Material Fact as to Whether Syniverse Committed Attempted Monopolization in Violation of the Sherman Act. The Magistrate Judge next dismissed tyntec's attempted monopolization claim "[b]ecause tyntec has failed to establish harm to competition in general and because Syniverse's conduct was otherwise lawful." R&R at 32. Both conclusions are incorrect. First, tyntec clearly established harm to competition in general by showing that Syniverse excluded tyntec from the U.S. ICV market. See supra at 21-23. The Magistrate Judge simply misinterpreted this element of a Section Two claim. Second, Syniverse's conduct was unlawful for all of the reasons explained above. See supra at 3-24. Syniverse unlawfully refused to deal with tyntec; Syniverse's own documents prove that it did so in order to eliminate competition in the U.S. ICV market; and competition in that market has suffered as a result of Syniverse's conduct. This case presents a prototypical refusal to deal, and tyntec has established its attempted monopolization and monopolization claims under Section Two of the Sherman Act. 24 2 PageID 27711 III. There Are Genuine Disputes of Material Fact as to Whether Syniverse Tortiously Interfered With tyntec's Contracts and Prospective Business Relationships. Finally, the Magistrate Judge determined that Syniverse did not tortiously interfere with tyntec's existing contracts or prospective business relationships. R&R at 32-33. The Magistrate Judge was correct that these claims are premised on Syniverse's refusal to renew the Iris Peering Agreements. But that decision was unlawful for the reasons discussed above, and consequently the Magistrate Judge erred when he recommended dismissing these tort claims. The harm Syniverse has caused to tyntec's relationship with Shelcomm is sufficient reason to deny summary judgment as to tyntec's claims for tortious interference. Shelcomm's CEO, Erik Levitt, testified during his deposition that the service tyntec provides Shelcomm is not "fully operational due to the direct [i]mpact of Syniverse's actions." tyntec SOUF, Ex. 30, at 165:20-66:5; see also id. at 28:18-29:22 (Mr. Levitt testifying that Shelcomm has not been able to deploy a cellular network in the United States "due to the actions of Syniverse"). Here, where Syniverse's motivations are at best genuinely disputed, and at worst clearly anticompetitive, the correct result is to send tyntec's tort claims to a jury. Syniverse's illegal, anticompetitive conduct has already harmed tyntec's relationships with Flyp, Shelcomm, and TNS. See tyntec MSJ Opp. at 38-40. And tyntec cannot hope to compete for future customers if Syniverse does not agree to peer with tyntec on bill and keep terms. Again, bill and keep peering agreements are necessary for ICVs to compete in the U.S. ICV market— which helps explain why such agreements are ubiquitous, and why Syniverse's refusal to agree to such an agreement with tyntec was both aberrant and anticompetitive. CONCLUSION For the reasons set forth above, tyntec respectfully requests that the Court deny tyntec's and Syniverse's motions for summary judgment and set this matter for a trial. 25 2 PageID 27712 Dated: October 2, 2019 SUSMAN GODFREY L.L.P. By: /s/ Shawn J. Rabin William Christopher Carmody Shawn J. Rabin Jason C. Bertoldi 1301 Avenue of the Americas, 32nd Floor New York, NY 10019 (212) 336-8330 bcarmody@susmangodfrey.com srabin@susmangodfrey.com jbertoldi@susmangodfrey.com Vineet Bhatia 1000 Louisiana, Suite 5100 Houston, TX 77002 (713) 651-9366 vbhatia@susmangodfrey.com Amanda Bonn Meng Xi 1900 Avenue of the Stars, Suite 1400 Los Angeles, CA 90067 (310) 789-3100 abonn@susmangodfrey.com mxi@susmangodfrey.com GUNSTER, YOAKLEY & STEWART, P.A. Daniel P. Dietrich Florida Bar No. 934461 401 East Jackson Street, Suite 2500 Tampa, FL 33602 (813) 739-6970 ddietrich@gunster.com MAYER BROWN LLP Stephen M. Medlock 1999 K Street, N.W. Washington, D.C. 20006 (202) 263-3000 smedlock@mayerbrown.com Attorneys for Plaintiffs 26 2 PageID 27713 CERTIFICATE OF SERVICE I hereby certify this 2nd day of October, 2019, I electronically filed the foregoing with the Clerk of Court for the United States District Court for the Middle District of Florida by using the CM/ECF system which will send a notice of electronic filing to all CM/ECF registered parties. /s/ Shawn J. Rabin Shawn J. Rabin 27